Extra money from Indiana’s newly-enacted tax cut can be expected in July

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You’ll begin to see extra money from Indiana’s newly-enacted tax cut in July.

The typical household will save 35 dollars this year from the repeal of a tax on utility bills. That savings will more than triple next year to 114 dollars, when the repeal is in effect for the full year, and the first phase of an income tax cut kicks in.

By 2029, you’ll pay 255 dollars less, if the entire tax cut kicks in. Legislators incorporated an economic temperature check every two years, starting in 2025, before implementing additional cuts. Indiana revenue has to grow by two-percent for the tax rate to go down. And starting in 2027, the final phases of the cut take effect only if Indiana has finished paying off the unfunded debt in teachers’ pension fund.

Indiana Chamber president Kevin Brinegar says Indiana’s economy is running so far ahead of projections that legislators pretty much had to cut taxes. Those projections have been revised upward three times, with the state now expecting the surplus to double to five-billion dollars before the tax cuts.

But Brinegar says legislators should have gone further and removed a floor on the taxes businesses owe on their equipment. He says it would have stimulated investment, and calls the tax “completely unfair,” since aging equipment is taxed at a minimum of 30-percent of its original value, even if it’s now worth far less.

The equipment tax goes to cities and counties, not the state. Senate Republicans stood firm against including that change in the tax cut package, saying they won’t support anything that reduces the money local governments have to work with.

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